Eiger BioPharmaceuticals (Eiger BioPharmaceuticals) Predictability Rank

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What is Eiger BioPharmaceuticals Predictability Rank?

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

Eiger BioPharmaceuticals Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

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Eiger BioPharmaceuticals (Eiger BioPharmaceuticals) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Eiger BioPharmaceuticals Inc (OTCPK:EIGRQ) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

72C:Germany 72C:Germany

Address

2155 Park Boulevard, Palo Alto, CA, USA, 94306

Website

https://www.eigerbio.com

Eiger BioPharmaceuticals Inc is a commercial-stage biopharmaceutical company focused on the development and commercialization of drugs for serious, rare, and ultra-rare diseases with high unmet medical needs and no approved therapies. Its program lonafarnib, a prenylation inhibitor, boosted with ritonavir, for the treatment of Hepatitis Delta Virus (HDV) infection, is in Phase 3 clinical development. Its product candidate pipeline includes Lonafarnib (LNF) in HDV, Peginterferon Lambda (lambda) in HDV, LNF in Progeria, and Progeroid Laminopathies (PL), Avexitide in Post-Bariatric Hypoglycemia (PBH), and Avexitide in Congenital Hyperinsulinism (CHI), all advancing toward Phase 3.

Executives

Richard A Kayne	10 percent owner
Leen Kawas	10 percent owner	4000 MASON ROAD, SUITE 300, BOX 352141, SEATTLE WA 98195-2141
Ingrid Choong	officer: Chief Business Officer	24645 SUMMERHILL AVE, LOS ALTOS CA 94024
William G Kachioff	officer: CFO	4060 PORTE DE PALMAS, SAN DIEGO CA 92122
James Vollins	officer: General Counsel	C/O BIODELIVERY SCIENCES INTERNATIONAL, 4131 PARK LAKE AVE SUITE 225, RALEIGH NC 27607
Mayer Eldon C. Iii	officer: Ex VP & Chief Commerc. Officer	RIGEL PHARMACEUTICALS, INC., 1180 VETERANS BLVD., SOUTH SAN FRANCISCO CA 94080
Lisa Kelly-croswell	director	C/O SYNLOGIC, INC., 301 BINNEY STREET, SUITE 402, CAMBRIDGE MA 02142
Thomas John Dietz	director	C/O TRANSCEPT PHARMACEUTICAL, INC., 1003 W. CUTTING BLVD, STE 110, PT. RICHMOND CA 94804
Jeffrey S Glenn	director	350 CAMBRIDGE AVENUE, SUITE 350, PALO ALTO CA 94306
David Apelian	director	C/O ACHILLION PHARMACEUTICALS, INC, 300 GEORGE STREET, NEW HAVEN CT 06511
Sriram Ryali	officer: Chief Financial Officer	C/O EIGER BIOPHARMACEUTICALS, INC., 2155 PARK BLVD., PALO ALTO CA 94306
Christine Murray	director	C/O ACHAOGEN, INC., 7000 SHORELINE COURT, SUITE 371, SOUTH SAN FRANCISCO CA 94080
Erik Atkisson	officer: GC & Chief Compliance Officer	C/O EIGER BIOPHARMACEUTICALS, INC., 2155 PARK BLVD., PALO ALTO CA 94306
Kim Sablich	director	C/O MYOVANT SCIENCES INC., 2000 SIERRA POINT PARKWAY, BRISBANE CA 94005
David A Cory	director, officer: President and CEO	350 CAMBRIDGE AVENUE, SUITE 350, PALO ALTO CA 94306